Mich. 673, 85 N. W. 96, 86 N. W. 809, 84 Am. | road as the traffic conditions required; that St. Rep. 589. said company, in listing its rolling stock But counsel for the state insist that the with the auditor of state in the year 1913, company has not brought itself within the described all the rolling stock so owned by it provisions of the General Revenue Law as at the time, and apportioned, as the part construed by this court in Peirce v. Carlock, thereof to be assessed as assets or property 224 III. 608, 79 N. E. 959, Siegfried v. Ray- pertaining to said charter lines, percentages mond, 190 Ill. 424, 60 N. E. 868, and Sellars of said classes of rolling stock based upon v. Barrett, 185 Ill. 466, 57 N. E. 422, in order the use thereof on said charter lines in comto be entitled to the deductions of debts from parison with the total use on said operated the credits for the year here in question. system as shown by the mileage made on The company is not in the same situation as said respective parts; that by said method to this deduction as were the property own- said company, in said schedule filed with the ers in the cases just cited. In none of those auditor, assigned as the part of the charter cases did the property owners take the prop- lines 28.57 per cent. of the total locomotive er steps to have the deductions allowed, value, 34.16 per cent. of the total passenger while here the company, upon forms prepar- train car value, and 35.37 per cent. of the ed by the state auditor, made its return, ask- total freight and other car value; that on ing and demanding that its debts be deduct- said 31st day of March, 1913, said company ed from its credits, as had been permitted owned and was in possession of a large and allowed under similar schedules for amount of other tangible personal property, similar returns for the years from 1906 to consisting of railroad supplies, steel rails, 1912, immediately preceding the return of ties, bolts, plates, material for car and enthis schedule. Under the authorities and gine repairs, and other like classes of tangithe rules heretofore laid down in this opin-ble property, a portion of which was intendion as to the equality and uniformity required for use on the charter lines and another ed by the Constitution in assessing and levying state taxes against the property of this company, it is entitled, under the provisions of the General Revenue Law as well as under the provisions of the Constitution, to the deduction of its bona fide debts from the credits, the same as other corporations and individuals. portion of which was permanently located outside of Illinois in other states and intended for use upon said noncharter lines in other states; that said material outside of the state appeared never to have been upon the charter lines; that said company also held similar personal property on its charter lines for use thereon; that said property located in other states was not returned as taxable Separation of Charter and Noncharter Line in this state on said schedule for 1913. Property. [9] The company has 705.5 miles of charter line railroad. Under due authority of law it has acquired additional lines of railroad other than its charter lines, some being held by fee title, some by lease and stock ownership, and some controlled by stock own ership alone. These are called "noncharter lines." Including said noncharter lines, in the year 1913 said company directly operated as one system 4,763 miles of railroad. These noncharter lines are in some score or more different states, west, north, south, and east of Illinois. The total length of said noncharter lines of railroad in Illinois is about 1,348 miles, all of which, except about 26.03 miles, are owned in fee by the company. It appears that on March 31, 1913, the company was possessed of a large amount of rolling stock, reasonably sufficient to equip said railroad owned and operated by it as one system; that said rolling stock consisted of 57,201 freight cars, 1,038 passenger train cars, 3,373 work cars, 1,460 locomotives, and other miscellaneous equipment; that part of said rolling stock was during the year 1913, and prior thereto, used exclusively on said charter lines; that the remainder was not assigned to specific portions of said railroad, either charter or noncharter lines, but was used in common on all parts of said rail The state claims that under section 18 of the company's charter it was its duty to keep accurate accounts of the operation, expense, etc., of its noncharter lines for the purpose levied upon charter line property. The proof fixing the proper amount of tax to be vision of section 18 requiring the company to keep accounts reads: receipts or income aforesaid, an accurate ac"For the purpose of ascertaining the proceeds, count shall be kept by said company." The record shows that the company has always had a system of keeping accounts in such a manner as to intend on its part to comply with said section 18. The proof shows that the state has at four different times-in 1882, 1883, 1885, and 1899-had a special accountant or commission examine the method of keeping the accounts of the company's gross proceeds and income of the charter lines, and has in each instance approved the method used by the company; that the manner of keeping the accounts in 1913 did not differ materially from the method so approved by said state's representatives, except as the accounting rules now prescribed by the Interstate Commerce Commission required a change. In State v. Illinois Central Railroad Co., 246 Ill. 188, 240, 92 N. E. 814, 837, this court said: "The obligation rests upon appellee [the railroad company] to make true and accurate state ments of its gross receipts to the state. In a lines. The taxpayer manifestly does not ocproceeding of this kind the relations of the par-cupy any such fiduciary relation to the assesties under this charter are such that the burden of proof rests upon appellee to show that such semiannual statements are true and accurate." The court was there referring to the accounts that the company had expressly agreed to keep under the provisions of its charter. It was not held there that an account of expenses should be kept, nor a distinct separation of property preserved, in order that the auditor of public accounts, as assessor, might the more conveniently assess the property. The keeping of detailed accounts, dividing every item of expense among the respective lines, would undoubtedly be exceedingly costly, and the proof shows that it has never been done or required, nor the failure so to do criticized, in any examination of the accounts. The company has a dual capacity in operating its charter and noncharter lines. It owns and operates the charter lines under the powers granted by its charter; it owns, possesses, and operates the noncharter lines under the authority granted to it by general laws. Its duty to the former is no more absolute than its duty to equip and operate the noncharter lines. It is not intended here to hold that the company is keeping these accounts as the charter requires they should be kept, so as to make a correct report to the state of the company's receipts and disbursements. We are here only considering what the duty of the company was in keeping these accounts to furnish a proper basis for assessing the state tax for the year in question. The state contends that such intermingling of charter line equipment with noncharter 'line equipment as is here shown renders it impossible for the state auditor to assess the property of the charter lines, and that therefore this case should be governed by the rules applicable to the wrongful intermingling of one person's goods of his own business with the property and business of another person for whom he acts as agent and to whom he sustains some fiduciary relation; that the state auditor, in levying the tax under such situation, should be authorized to treat as charter line property all the company's noncharter line property which is not affirmatively shown to be noncharter line property, under the reasoning of the following and other like cases: Diversey v. Johnson, 93 Ill. 547; First Nat. Bank of Elgin v. Schween, 127 Ill. 573, 20 N. E. 681, 11 Am. St. Rep. 174; Jewett v. Dringer, 30 N. J. Eq. 291. We cannot so hold. None of these were tax cases. The state of Illinois authorized the company to operate and control its charter and noncharter lines, and whatever intermingling of the property there has been. seems to be the result of proper performance of the duties of the company in conducting the business of the charter and noncharter lines. There has been no wrongful intermixture of the property or business of the two classes of sor as was occupied by the parties in the authorities relied on by counsel for the state. This is not a suit in equity, such as State v. Illinois Central Railroad Co., 246 Ill. 188, 92 N. E. 814, but a proceeding to establish a value on property for the purpose of taxation. There was no other or different burden upon the company than upon any other taxpayer to furnish a correct list and valuation of the property, except as may be specifically provided in said charter of the company and said act of 1859, and the provisions there found on this point do not differ materially from those in the General Revenue Law. The said act of 1859 authorized the auditor, for the purpose of placing a value upon the property, to inspect the books of the company and examine any of its officers or employés, or take any evidence "by which to make out a proper list and valuation." It is the duty of the company to make a return in its schedule of all its charter line property at its fair cash value, and, if the state auditor is not satisfied with that schedule, to furnish that official with every reasonable facility to ascertain what is charter line property and its value; but we find nothing in the charter provisions or under the general provisions of the Revenue Law, in the light of the proof in this record, that would justify the auditor in assessing arbitrarily the property used on the noncharter lines as charter line property. Moreover, we think it is affirmatively shown by the proof taken before the commissioner that the company had returned in its schedule to the state auditor on all classes of property, except tangible property other than rolling stock, the fair proportion of all the property of the charter and noncharter lines taxable as charter line property. As we understand the argument of counsel for the state, they contend that notwithstanding the total amount of rolling stock and other property of the company many times exceeds the requirements of the charter line, and that it is, in part, taxed for the noncharter lines, yet all the property owned by the company in use both on charter and noncharter lines must be included in this assessment. The rule sought by counsel to be enforced here is not as to the just apportionment of the earnings between the charter and noncharter lines under the special terms of the company's charter, but whether all the equipment used in common may be arbitrarily included in the tax assessment of the charter lines because of possible difficulties that may arise in charter receipts accounting. Valuation of Railroad Track and Right of Way. [10] A question that has been argued at length in the briefs is the method of valuing the tangible property of the company and the value which should be put upon it, whatever method is adopted. Section 22 of the charter requires that an annual tax shall be levied by the auditor upon all the property and assets, of every name, kind, and description, belonging to such corporation. The largest single item of tangible property is the railroad track of the charter lines, which the commissioner found to be 705.5 miles in length. He placed the fair cash value of this railroad track on March 31, 1913, at $75,000,000. The auditor assessed the charter line railroad track at $125,000,000. The company, for the year 1913, on the form of schedule prepared by the state auditor, returned to that official, among other items therein required, the aggregate value of the railroad track of the charter lines to be assessed as $101,776,098. On the hearing before the commissioner much evidence was presented as to the proper method of valuing this charter line railroad track. Several expert witnesses familiar with the value of railroads testified as to the value of such charter line track and right of way. Testimony was given as to the market price on sales of stock and bonds of the company at the date in question. Evidence was also heard as to the value of this property, deduced, under the evidence, from the value of the company's operated system, and as to the value based upon the "cost of production less depreciation." Evidence was also heard as to other methods of valuing. In the view we take of this question the company is not in a position to claim that its property known as railroad track is of less value than that fixed in the return to the auditor of public accounts for said year 1913. Proof was offered as to how this valuation was arrived at by the company in its return. This, we think, is not the material question. The authorities in this state, as well as the weight of authorities in other states, are to the effect that a taxpayer is bound by his own statements as to the nature, title, and value of the property made in the list which he returns for taxation. "In the absence of any evidence of fraud, accident, or mistake, a property owner is bound by a schedule of his taxable personalty given by him to the assessor." 1 Cooley on Taxation (3d Ed.) 618; 37 Cyc. 994, and cases cited; 27 Am. & Eng. Ency. of Law (2d Ed.) 671, and cited cases. This court held in People v. Atkinson, 103 Ill. 45, that where a person makes out and delivers to the assessor of the town in which he keeps his business office a schedule of the amount, quantity, and quality of his personal property required to be listed for such taxation, he will be bound by such return, though a portion of the property is required to be returned by him to the assessor of a different town, where he is also assessed; the court saying that it was a safe rule to hold that, where a person makes out and delivers to the assessor the amount, quantity, and quality of his personal property, he should be bound by such return. In Peoria, Decatur & Evansville Railway Co. v. Goar, 118 Ill. 134, 8 N. E. 682, the court held that, where the railroad company had make a mistake is not properly including what was really railroad track, the mistake could be corrected later by court proceedings; but this decision in this respect was subsequently overruled in the case of Iowa Central Railway Co. v. People, 156 Ill. 373, 375, 40 N. E. 954, 955, this court there holding the state board of equalization was not authorized to assess as right of way of a railroad company, real estate included in the schedule filed by the company with the county clerk as not being railroad track, saying: * * "We think that appellant is bound by the statement, made in the schedule filed with the county clerk. It was not the intention of the Legislature to clothe the local assessor with the power to assess railroad land or not, according to his own view of the question, whether it is railroad track or real estate other views we said in Indianapolis & St. Louis Railthan railroad track. In harmony with these way Co. v. People, 130 Ill. 62 [22 N. E. 854]: 'It was the duty of the company to make a true return of its property, and both the state board and the local assessor had a right to act upon the supposition that it had honestly discharged that duty.' Still again, in the more recent case of Cairo, Vincennes & Chicago Railway Co. v. It was the duty of appellant, Mathews, 152 Ill. 153 [38 N. E. 623], we said: under sections 40 and 41 of the Revenue Act, to make out and file with the county clerk a statement or schedule showing the property held for right of way, etc. It is to be presumed that it performed this duty, and that the county officials relied upon the statement or schedule filed,, as an accurate description of the right of way.' * * In Dennison v. County Com'rs, 153 Ill. 516, 39 N. E. 118, the court held that a taxpayer was bound by his voluntary return to the assessor, and, there being no evidence of fraud, accident, or mistake, the county board could not relieve him because such schedule included property that could not legally be assessed. See, also, to the same effect, Tolman v. Raymond, 202 Ill. 197, 66 N. E. 1086. This same rule has been adopted in the following, among other, cases: Inland Lumber & Timber Co. v. Thompson, 11 Idaho, 508, 83 Pac. 933, 114 Am. St. Rep. 274, 7 Ann. Cas. 862; State v. Northern Trust Co. 73 Minn. 70, 75 N. W. 754; Central Pacific Railroad Co. v. California, 162 U. S. 91, 16 Sup. Ct. 766, 40 L. Ed. 903; Adams Express Co. v. Ohio, 166 U. S. 185, 17 Sup. Ct. 604, 41 L. Ed. 965; City of Waterbury v. O'Loughlin, 79 Conn. 630, 66 Atl. 173; Randell v. City of Bridgeport, 63 Conn. 321, 28 Atl. 523; Greenwoods Co. v. Town of New Hartford, 65 Conn. 461, 32 Atl. 933; Hunt v. Turner, 54 Fla. 654, 45 South. 509; City of Tampa v. Mugge, 40 Conn. 326, 24 South. 489; Slimmer v. Chicka wa Co., 140 Iowa, 448, 118 N. W. 779, 17 Ann. Cas. 1028. In several of these cases the decisions of our court heretofore cited have been quoted with approval on this question. The public has an interest in the collection of taxes from every property owner. The rule that the property owner cannot question the correctness of his schedule is not ground Counsel for the company seem to argue that the law does not require it to value its property in making the return to the state auditor, and therefore its schedule cannot be binding. In this we think they are in error. Section 22 of its charter required that the president, secretary, or other officer should list the stock, property and assets belonging to said company with the auditor. Section 3 of said act of 1859 requires: ed upon the doctrine of estoppel as that doc- [ation, in the absence of fraud, accident, or trine is ordinarily applied. The decisions in mistake, is bound by the valuation given in the cases cited do not rest upon the usual such list or schedule. principles of estoppel nor contain the elements usually required in courts of equity in the application of that doctrine. They seem to rest rather upon the principle that it is the duty of the taxpayer to see that the list of property is furnished to the proper officers, and that it is against public policy to permit him to make such schedule and then question its accuracy, whether the failure to certify the proper list of property was intentional or unintentional. The rule in this state being in accord with this reasoning, there can be no relief for an incorrect schedule, in the absence of fraud, accident, or mistake. Counsel for the company argue that these authorities are not in accord with the authorities Section 8 of said act of 1859 provides: in certain other jurisdictions. This is true. In some of those jurisdictions the courts rec-in this act, shall be deemed and taken to mean "That the terms 'list' and 'valuation,' as used ognize plainly the fact that our decisions are not in accord with the rules laid down by certain other courts. Counsel for the company further argue that the decisions already cited are grounded on the fact that the schedule of the property owner is binding because he has misled the public officials, but that in this case the public officials have not been in any way misled, as the state auditor did not follow the schedule of values. As already stated, the.rule laid down in this state is not based on the doctrine of estoppel. The Connecticut cases heretofore cited are practically on all fours with the facts as here presented, and it was there held that, even though the assessing authority had seen fit to raise the value fixed by the property owner, the court, when it finally passed on the value, would not fix the valuation lower than that fixed in the return of the property owner. Here the vice president of the company signed and swore to the correctness of the schedule returned to the state auditor, and the statement of this official was the statement of the corporation. No claim can be made that the errone That said railroad company "shall list their stock, property and assets, as required by section 22 of their charter, with the auditor of public accounts, and if the auditor shall believe that the valuation thereof is too low, or that the whole of the stock, property and assets, owned by said company, other," etc. the stock, property, assets and other things owned by said company, set down in a list or schedule for taxation, and the value placed thereon, as above provided." The evidence shows that for the years from 1906 to 1912, inclusive, the company made its returns to the state auditor on a schedule form similar to the one here under consideration for 1913, and that in each schedule it gave the value of the various items of property in a manner similar to that in which it was given on this schedule. The aggregate total cash value for extending the tax on the railroad tracks and right of way of the charter lines should be the amount in such schedule returned-that is, $101,776,098. Valuation of Rolling Stock for Purpose of [11, 12] The value of all the rolling stock of charter and noncharter lines is $42,675,857. The state auditor held that this entire amount should be the aggregate or full cash value of the rolling stock to be assessed. The company in its return to the state auditor ous valuation of this railroad track and right gave the full cash value of the rolling stock as $14,095,530, and the commissioner, after of way was due to any fraud, accident, or a review of the evidence taken before him, mistake, as those terms are used in the law, held that this sum represented the fair proit being contended only that the railroad offi- portion of said total rolling stock and its cial who made up the schedule adopted the value assessable to the said charter lines. wrong theory for fixing the value of the rail- While the general rule is that the situs of road track and right of way, making the cost personal property follows the domicile of the of reproduction, less depreciation, the basis owner, it is a rule of convenience, subject of his valuation, and it is now insisted by to legislative change, and is not ordinarily counsel for the company that this is not a applied to property distributed along an exproper basis upon which to figure the actual tended railroad system. It may well be cash value of the railroad track and right of doubted whether it can reasonably be applied way. The commissioner found that it was to such property of a railroad corporation as not the proper basis, and the weight of proof between the different localities along its line in this record tends to support that conclu- of road. The general rule that personal sion. But even though, as an original ques- property follows the domicile of the owner, tion, the conclusion of the commissioner on after all is "merely the law of the state this point is correct it cannot control here, which recognizes it, and when it is called in view of the rule of law in this state that into operation as to property located in one the taxpayer who lists his property for tax-state and owned by a resident of another, it is a rule of comity in the former state rather than an absolute principle in all cases." State Railroad Tax Cases, 92 U. S. 575, 23 L. Ed. 663. Section 45 of the General Revenue Law of this state provides that: "The rolling stock shall be listed and taxed in the several counties, towns, villages, districts and cities, in the proportion that the length of the main track used or operated in such county, town, village, district or city bears to the whole length of the road used or operated by such person, company or corporation, whether owned or leased by him or them in whole or in part. Said list or schedule shall set forth the number of miles of main track on which said rolling stock is used in the state of Illinois, and the number of miles of main track on which said rolling stock is used elsewhere." Hurd's Stat. 1913, p. 2033. In construing this statute this court held in Ohio & Mississippi Railroad Co. v. Weber, 96 Ill. 443, on page 450, that the plain object of this statute "is to subject each railroad company in this state to taxation in proportion to the value of all of its property subject to taxation in this state, whether tangible or intangible, real, personal, or mixed, embracing, among other kinds of property, the franchises exercised within or granted by this state." The court further held that it could not be inferred that the state board of equalization acted corruptly merely from the fact that it held that such a distribution was in proportion to the mileage of the corporation lying in the district where the tax was to be levied. In Pullman's Palace Car Co. v. Pennsylvania, 141 U. S. 18, 11 Sup. Ct. 876, 35 L. Ed. 613, where the statute of a state imposed a tax upon the capital stock of all corporations engaged in the transportation of freight or passengers in the state, it was held that a corporation engaged in running railroad cars into, through and out of the state, and having at all times a large number of cars within the state, might be taxed by taking as the basis of assessment such proportion of its capital stock as the number of miles of railroad over which its cars were run within the state bore to the this state, and of all corporations organized un- The assessment was made on all the cars of the company, though the greater number were at the time in use in other states. It was held that this amounted to a deprivation of property without due process of law. The court said (199 U. S. 206, 26 Sup. Ct. 38, 50 L. Ed. 150, 4 Ann. Cas. 493): * * intangible property at the domicile of the owner * * * We deem it unnecessary to quote from the many other authorities referred to in the briefs on this question. Said section 45 of the Revenue Law and all the authorities seem to be in accord that only that proportion of the rolling stock that the proof here showed was habitually used or employed the rules here laid down, should be included within this state, found in accordance with in the aggregate cash value of said rolling stock for the levying of the said tax. Counsel for the state insist that the full valuation whole number of miles in all the states over which its cars were run. In American Refrigerator Transit Co. v. Hall, 174 U. S. 70, 19 Sup. Ct. 599, 43 L. Ed. 899, where the proof showed that the cars used by the company in the state of Colorado were not continuously the same, but were constantly changing, according to the exigencies of the should be taken for assessing purposes. The business, it was held that the state tax "may commissioner found that the portion of the be fixed by an appraisement and valuation of rolling stock that should be assessed amountthe average amount of the property thus ed to $14,095,530. Counsel for the company habitually used and employed." In Union agree that this is the correct amount. The Refrigerator Transit Co. v. Kentucky, 199 proof in this record shows very clearly, in U. S. 194, 26 Sup. Ct. 36, 50 L. Ed. 150, 4 our judgment, that this amount is the valuaAnn. Cas. 493, the defendant, a Kentucky tion of the proper proportion of the rolling corporation, owned 2,000 cars, which it em- stock that should be assessable as charter ployed by renting them to shippers for the line property. This is also the value in the carriage of freight in the various states. A schedule returned by the company. AccordKentucky statute provided that: ing to the authorities heretofore cited, the conclusion necessarily follows that this is the amount that should be taken as the total "All real and personal estate within this state, and all personal estate of persons residing in |